U.S. Court Blocks Gamer-Led Attempt to Halt Microsoft-Activision Deal
The $69 billion deal of Microsoft Corp (NASDAQ: MSFT) with "Call of Duty" creator Activision Blizzard Inc (NASDAQ: ATVI) survived an early legal hurdle when a U.S. court denied a preliminary block request on the acquisition, brought by video gamers in a private lawsuit.
Plaintiffs Label the Acquisition Anti-Competitive
In December, the private plaintiffs launched their lawsuit in a California federal court, arguing that the mammoth deal threatened fair competition in the gaming industry.
Ruling in Favor of Microsoft and the Merits of the Case
U.S. District Judge Jacqueline Scott Corley, seated at the San Francisco federal court, ruled on Friday night that the gamers failed to convincingly demonstrate they would face "irreparable harm" if the merger went ahead before she could rule on the case's merits. Meanwhile, Microsoft and its legal team argue that the acquisition would benefit consumers.
Allegations on Game Availability Dismissed
Judge Corley dismissed the plaintiffs' claims that Microsoft would restrict the game's availability following the merger. She highlighted a lack of evidence suggesting Microsoft would disable the current "Call of Duty" versions post-merger.
Microsoft's Silence and Gamers' Unyielding Spirit
Despite the ruling, a representative for Microsoft was not immediately available for comment on Monday. However, despite the initial setback, the gamers' lawyer reassured them they would continue contesting the deal.
Antitrust Concerns and a Pending Appeal
The gamers' legal representative, Joseph Alioto, pointed out the court's conclusion that a preliminary injunction "was not necessary at the moment" while highlighting "very strong" evidence suggesting the proposed acquisition infringes on U.S. antitrust law. This ruling arrived shortly after Microsoft secured E.U. antitrust approval, but it continues to face regulatory scrutiny in the U.S., China, and South Korea.
Previous Lawsuit Dismissed, New Complaint Under Review
In March, Judge Corley dismissed the gamers' initial lawsuit, stating that the plaintiffs had failed to provide sufficient factual support for claims that the deal contravened U.S. antitrust law. The judge, however, allowed the plaintiffs to submit an amended complaint. Microsoft's application to dismiss this latest lawsuit is currently pending.
This case, called DeMartini v. Microsoft Corp, is being held in the U.S. District Court, Northern District of California, under the number 3:22-cv-08991.